Services Marketing

Unit-6

Service Marketing Strategies

MBA-3rd Sem-2009-2011

• Formulating service marketing strategies

• Designing communications mix for promoting services

• Role of information technology in marketing of services

Learning Objectives

• To understand the general role of communications in services marketing

• Understand the effective use of communications channels

• To understand the role of corporate design/brand within marketing communication strategy

• To understand the use of Internet in communicating services

ServiceCharacteristics

IntangiblePerformance not the object

Provide tangible cluesInformation helps to

reduce risk

InseparableUse personnel to

educate customers“how it works”

Poor information = Nasty surprises

Personal information = important

IntermediariesIn some services

Can be very importantBut not all

PerishablePromote specific periods when

necessary

Issues in communicating services

• Use analogy: Accenture Performance / golf

• http://www.youtube.com/watch?v=w3NKMUOc7PA

• Tarpon

• http://www.youtube.com/watch?v=4hv_V_Af19M

Communications Challenges in Services Marketing

• Facilitate customer involvement in production – prepare customers for service experience and demonstrate roles– teach customers about new technologies, new features

• Help customers to evaluate service offerings– provide tangible or statistical clues to service performance– highlight quality of equipment and facilities– emphasize employee qualifications, experience, professionalism

• Stimulate or dampen demand to match capacity– provide information about timing of peak, off-peak periods– offer promotions to stimulate off-peak demand

• Promote contribution of service personnel – help customers understand service encounter– highlight expertise and commitment of backstage

personnel

People as communication platform Virgin Atlantic vs. Singapore airlines

• http://www.youtube.com/watch?v=EPIjCS9YRw4

• Singapore Airlines

http://www.youtube.com/watch?v=ykSBMqffuQ8

Goods v Services Implications for communications strategy

• Provide tangible clue/evidence• Educate and train customers to use and to

evaluate services• Help manage demand levels to match firm’s

capacity• Reduced communication role for intermediaries• Importance of contact personnel requires

internal communication to inform, motivate and create role models

Education as part of communications

Informwhat the

company does

Educatehow it’s done

Persuadethat the best solution is

offered

RemindRenewable service

Maintain contactUpdates

Further education

Educate employeesto deliver

all/partcommunications

Develop WOM support

Teach customers how to use the serviceManage demand levels

Reduce uncertainty by providing usefulinformation and advice

Provide reassurance (eg service guarantees)Recognise and reward valued customers

Common educational and promotional objectives

Create tangible, memorable imagesBuild awareness and interest to stimulate trialCommunicate brand’s strength and benefits

Counter competitive claimsReposition service relative to competition

SMART objectives

The 5W’s model for communication plan

• Who is our target audience?

• What do we need to communicate and achieve?

• hoW should we communicate this?

• Where should we communicate this?

• When do the communications need to take place?

The integrated services communications mix

Messages originating within the organization

Messages originating outside the organization

Production

Channels

MarketingChannels

Front-line staff

Service outlets

AdvertisingSales promotionsDirect marketingPersonal sellingPublic relationsE-comms.

Word of mouth

Media editorial

AUD IENCE

Word of Mouth• Perceived as more credible than firm-initiated

promotional activities• Have a powerful influence on people’s

purchasing decision • The higher the risk the more important for WoM• Less knowledgeable customers rely more on

WoM• Dissatisfied customers are more likely to pass

negative WoM than satisfied customers• Indicator for profitability (Reichheld, 2003)

WoM (con.)

• Stimulate positive and persuasive comments from existing customers by:– Referencing other purchasers and knowledgeable individuals– Create Buzz – exciting promotion, events – Developing referral incentive scheme– Publicising testimonials that simulate WoM

• Internet is ubiquitous & openly accessible, it has accelerated the spread of personal influence which evolves into a “viral marketing” phenomenon. e.g. blogs

• http://blogs.ebay.com/

• http://www.suspendedfromebay.com/

What is Brand Equity and Why Does It Matter?(From Berry, “Cultivating Brand Equity”)

Definition: A set of assets and liabilities linked to a brand’s name and symbol that adds to (or subtracts from) the perceived value of the product

• Brand equity can be positive or negative

• Positive brand equity creates marketing advantage for firm plus value for customer

• Perceived value generates preference and loyalty

• Management of brand equity involves investment to create and enhance assets, remove liabilities

Corporate design, name, colour, image -recognizable symbols

A Service Branding Model: How Communications + Experience Create Brand Equity

Source: Adapted from L. L. Berry ( 2000) Cultivating Services Brand Equity, Journal of the Academy of marketing Science, 28(1), 128-137

Marketer-controlled communications

Firm’s Presented Brand (Sales, Advertising, PR)

What Media, Intermediaries,Word-of-Mouth Say re: Firm

Customer’s Experience with Firm

Awareness of Firm’s Brand

Meaning Attached To Firm’s Brand

Firm’sBrand Equity

Uncontrolled brand communications

Integrated communications

SERVICEBRAND

IDENTITY

ServicescapeDesign

Brand NameAnd Positioning

MarketingCommunications

Mix

CorporateDesign Elements

InteractiveMarketing

Marketing Communication and the Internet

• International in Scope– Accessible from almost anywhere in the world– Simplest form of international market entry

• Internet Applications– Promote consumer awareness and interest– Provide information and consultation– Facilitate 2-way communications through e-mail and chat

rooms– Stimulate product trial– Enable customers to place orders– Measure effectiveness of specific advertising/promotional

campaigns

Marketing Communications and the Internet

• Web Site design considerations – Memorable address that is actively promoted – Relevant, up-to-date content (text, graphics, photos)– Contain information that target users will perceive as useful/interesting– Easy navigation– Fast download– http://www.youtube.com/watch?v=9EQeFq2he4U&feature=related

• Internet advertising– Banners and buttons on portals and other websites seek to draw online

traffic to own site– Limits to effectiveness—exposure may not lead to increases in

awareness/preference/sales– Hence, advertising contracts may tie fees to marketing relevant behavior

(e.g., giving personal info or making purchase)